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BROOKLYN, N.Y. (Legal Newsline) - Clarivate PLC finds itself sued by an Arkansas pension system that purchased stock in the company.
Arkansas Teacher Retirement System filed the lawsuit March 11 in Brooklyn, N.Y., federal court against Clarivate and a group of co-defendants that includes Citigroup Global Markets, Barclays Capital and PriceWaterhouseCoopers.
Clarivate, an information services and analytics company that went public in May 2019, faces allegations its financial statements misled investors because of mistakes in its accounting.
In June, it raised $1.4 billion with a preferred shares offering based on figures released in its quarterly reports.
"These statements were materially false and misleading," the suit says. "In truth, Clarivate's financial statement... violated generally accepted accounting principles, the company maintained defective disclosure controls and procedures as a result of material weakness in its internal control over financial reporting, and the foregoing material weakness was not limited to how the company accounted for warrants."
On Dec. 27, Clarivate admitted to an error. It incorrectly recorded as part of accounting for the acquisition of CPA Global about $185 million in equity awards, the suit says.
"To correctly amount for the equity awards, (generally accepted accounting practices) recognized Clarivate to recognize the equity awards expenses as stock-based compensations charges over the vesting period from Oct. 1, 2020, to Oct. 1, 2021, with only a portion of the liability recorded as part of the acquisition accounting."
ATRS is represented by New York firm Bleichmar Fonti & Auld. A previous shareholder lawsuit by ATRS landed its lawyers at Lieff Cabraser and other firms in hot water in Boston federal court.